China’s State Council Plans on Merging the Country’s Milk Powder Companies Over the Next Four Years

The State Council announced Friday [13 June 2014] the working plan for merger and reorganization of formal milk powder enterprises in China. It aimed at a formation of 10 enterprise groups with annual sales revenue totaling 2 billion yuan ($320 million) by the end of 2015, with concentration ratio of top 10 domestic brands reaching 65 percent…Full Article: The Global Times June 2014

Key Point

The article notes that by 2018, the State Council hopes to have three to five enterprises that have a “concentration ratio” of over 80% (~CNY 5 billion or ~US$806 million)

ChinaAg Comment

According to a China Daily article published in March 2014, by 2017, China plans on having the major dairies of Inner Mongolia (e.g. Yili and Mengniu) to source 70% of its raw milk supply from their own farms (i.e. vertically integrated)